SBR- Content.pmd - INBO

State of the Basin Report - 2003incomes are 3-4 times larger in urban Phnom Penh than in rural Cambodia, thus making povertylargely a rural phenomenon. Ninety percent of the poor live in rural areas, and the highest povertyrate is found among households where agriculture is the primary source of income.In order to move Cambodia out of the ranks of the least developed countries by 2020, the NationalAssembly adopted the Second Socio-economic Development Plan (SEDP-II), with a strong focuson poverty reduction. 12 The government plans to follow a growth strategy aiming at increasingproductivity in agriculture, as well as levels of industrialisation.The Cambodian labour force is growing fast as a result of the post-conflict baby boom. Around200,000 persons are entering the labour market annually and real wages for unskilled workers inPhnom Penh are falling. 13 Increasing the level of industrialisation is expected to help create new jobopportunities and thereby increase earnings.1.3 Lao PDRIn 2000, GDP per capita in Lao PDR wasestimated at $330 14 (in 1990 prices), whichis equivalent to about $1540 in purchasingpower parity. 15 Real GDP growth in LaoPDR has been higher and more stable thanthat of Cambodia; over 7 percent in 1999and nearly 6 percent in 2000. 16 However,population growth of more than 2 percent 17partly offsets the impact of economic growthon per capita incomes. It is estimated that39 percent of the Laotian population is livingin poverty. 18Figure 2.Sector share of employmentand GDP, Lao PDRIn the LMB, agriculture’s share of GDP has declinedrelative to the manufacturing and service sectorsNote: Employment information reflects available data for mostrecent years 1997-2000. Agriculture includes foresty andfisheries. Data on employment not available for industry andservices.Source for employment: ESCAP. 2002.Sources for GDP: ADB. 2002. Asian DevelopmentOutlook 2002. ADB. 2001. Country Strategy Programs.IMF. 2002. Selected Issues and Statistical Appendix.As is the case with Cambodia, Lao PDR’seconomy is at a low level of development,with agricultural production accounting forover half of GDP 19 (see Figure 2). Anestimated 85 percent of the workforce isemployed in agriculture. 20 Industry andservices each account for roughly a quarterof GDP. 21 The economy of Lao PDR islargely based on the natural resources withinthe country and therefore depends on asustainable environment to generate futuregrowth.Agriculture led the economy’s recovery fromthe regional financial crisis of 1997-98. Theoverall growth rate of agriculture has goneup to about 5 percent per year, from a moretypical 2-3 percent per year. 22 Industry andenergy production led growth in 2000, and88